“As a panel, we were disheartened to see communities at a crossroads, despite countless studies, reviews and inquiries,” the report states.

“We heard from people caught in a one-way conversation — over-consulted and under-listened to.”

The Murray-Darling Basin Plan is intended to remove 2,750 gigalitres of water from agriculture and return it to the environment.

The report found that there is a wide gap between the basin's “winners and losers”.

“In previously vibrant communities, volatility, rapid change and uncertainty are resulting in sharp falls in investment and a loss of confidence,” the report said.

“These outcomes have contributed to widespread farm exits, social dislocation, vulnerable supply chains, small-town decline, and downstream processors and employers contemplating their future in the basin.”

The top recommendation of the report is for basin governments and all relevant authorities to “commit to providing greater clarity and certainty around long-term policy, and drive greater accountability and improved delivery of outcomes to build trust and ensure more people share in the benefits of basin water reforms”.

“Trust in governments, particularly federal and state, to deliver good, long-term policy and support regional and rural communities has been severely diminished.”

The report says a “growing toxicity” in the conversation around basin reform will continue until trust matter are addressed.

For First Nations communities, participation in water planning and access remains in-principle only.

“In practice, improved outcomes for First Nations people are yet to materialise, and some jurisdictions have made more progress than others,” the report found.

The report recommends increasing First Nations communities’ access to water for cultural and economic purposes, funding to work with experts to value ecosystem services at significant sites, and unsure their participation is part of the mainstream conversation on water policy and planning.

Federal Water Minister Keith Pitt says there have been too many reports and not enough action.

“My understanding is that there has been around 40 reports on the basin in only a few years,” he said.

“The time for reports is now done. We need to act on the recommendations, not only on this report, but all [of them]: the ACCC's report, and the report by [Interim Independent Inspector General for the Murray-Darling Basin] Mick Keelty, also the Productivity Commission's report.”

The panel is seeking public submissions on the draft report by April 20.